An informed and thought-provoking analysis of what lies behind the headlines and headaches of business ethics and corporate social responsibility

Tuesday, May 18, 2010

The Scandinavian Cooperative Advantage

Today we have another of our guest bloggers taking a turn on the Crane and Matten blog. Robert Strand from Copenhagen Business School sets out why he thinks there's a distinctly Scandinavian approach to corporate social responsibility (CSR).---------------------------------------------------------I had the pleasure of spending time with Andy Crane during his recent visits to the Copenhagen Business School Centre for CSR, where I am pursing my Ph.D. Andy asked if I would share a few words about the Scandinavian approach to CSR- a topic I find so interesting that I was compelled to leave my cushy corporate job in the US to move to the heart of Scandinavia and return to the days of being a poor student.

First off, why study CSR in Scandinavia? Well, for one, by pretty much any measure Scandinavia leads the world in strong CSR performances. Gather up a suite of your favorite CSR indices and you are sure to find a disproportionate amount of Scandinavian companies at the top. And given that humility is highly valued here, this is not likely the result of crafty Scandinavian spin-doctors.

So why does Scandinavia lead in CSR? Stereotypes are a real time-saver, so allow me to indulge in a few. It seems to be part of the Scandinavian cultural DNA for business leaders to encourage the “feminine” activities of collaboration, participation, and demonstrate far more humility than what I was accustomed to in US industry where the masculine John Wayne type was more likely to be hero-worshipped. Here in Scandinavia, conflict is considered best solved through negotiation and compromise and as a result Scandinavian companies have built trusting partnerships with NGO’s, government agencies, and even competitors to address common social and environmental challenges. This has led to a “Scandinavian Cooperative Advantage” (Strand 2009) that I believe will prove to be a long-term competitive advantage for the region in the face of increasingly complex social and environmental challenges that companies cannot solve alone.

IKEA offers a good example of the Scandinavian Cooperative Advantage in practice. At a going rate of about $10 for a pint of beer, Scandinavia is not exactly a prime place to manufacture low-priced furniture. So IKEA sources from low cost regions, which exposes them to a host of social and environmental challenges not typically known within the friendly confines of Scandinavia. Child labor poses a particularly complex challenge, and IKEA recognized that it did not possess the competencies to deal with this alone (which took a bit of humility, don’t you think?). Therefore IKEA formed partnerships with UNICEF and Save the Children where in collaboration with these NGO’s, the suppliers, and local communities it was determined that in most cases the children’s best interest would be served if they could continue to work for IKEA’s suppliers, however at reduced hours and with access to schools that they previously did not have. A hasty pullout by IKEA in the face of consumer boycott threats could make the situation worse for the children who may be forced into alternative forms of generating money, including prostitution.Thus as a result of IKEA’s willingness to collaborate, these children are better off and IKEA enjoys a more stable supply chain and has credible partners in UNICEF and Save the Children to vouch on its behalf in the face of consumer boycott threats.

What’s that? Oh, you noticed that I repeatedly plugged my own expression “Scandinavian Cooperative Advantage” in a shameless act of self-promotion. Keep in mind - I’m an American, not a humble Scandinavian.You can contact Robert at rs.ikl@cbs.dk. Check out his article in the Journal of Business Ethics: Strand, R. 2009. Corporate Responsibility in Scandinavian Supply Chains. Journal of Business Ethics. Volume 85, Supplement 1, pp. 179-185.

2 comments:

I am from Hungary and I had my first professional experience in Finland in a spin-off company as a business development trainee. I was surprised how "human" the working environment is and how much emphasis they put on minimizing the stress and conflicts. Although I have to say that in my opinion this emphasis on avoiding stress and conflicts can also cause some problems in the performance in the case of small start ups.

Thank you for your comments. I think you are hitting on two interesting points here. First, regarding the "human" working environment. I have never seen such friendly working conditions than in Scandinavian settings. Ample natural lighting, desks that move up and down so one can stand or sit, typically child friendly work schedules, etc. All in all, this helps to lessen the stresses. Regarding conflict, I would argue there is a bit more of a nuanced thing going on here. From what I have seen I would characterize avoidance of conflict in Scandinavia more in terms of attempting to engage with the conflict upfront and come to a consensus with stakeholders as a means to avoid bigger conflicts down the road. This requires a willingness to acknowledge problems coupled with ongoing engagement and discussion. Your comment rightfully implies that a balance must be struck as there are many times (particularly in the case of small start-ups) that a decision must be made rapidly and thus it is not always possible to engage with all stakeholders to come to a consensus. But I find that the more stakeholders were engaged in the process leading up to these times when rapid decisions must be taken, the more the decision makers can incorporate the views of the stakeholders even without consultation, and ultimately make better decisions for the long run. And when I broadly compare to my experiences in U.S., I think the Scandinavians do a particularly good job of this. (Of course we are taking in broad generalizations here, where independent experiences can vary.)

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Andrew Crane [L] and Dirk Matten [R]

Welcome to the Crane and Matten blog - for informed commentary and expert analysis on the everchanging world of corporate responsibility.

We are two business school professors from theSchulich School of Businessin Toronto, Canada, best known for our books and research articles on business ethics and corporate citizenship. We've been writing the Crane and Matten blog since 2008, offering unique insight on a range of issues from across the globe.

Andrew Craneis currently the George R. Gardiner Professor of Business Ethics.

Dirk Mattenis currently the Hewlett Packard Chair in Corporate Social Responsibility.